Tags: Kimberly | Clark | Profit | Pricing

Kimberly-Clark Profit Tops Estimates on Higher Pricing

Friday, 20 April 2012 09:42 AM

Kimberly-Clark Corp., the maker of Huggies diapers and Kleenex tissues, reported first-quarter profit that topped analysts’ estimates, helped by price increases and international sales growth.

Net income rose 34 percent to $468 million, or $1.18 a share, from $350 million, or 86 cents, a year earlier, the Dallas-based company said today in a statement. Excluding some items, profit was $1.24, compared with the $1.17 average of 13 analysts’ estimates compiled by Bloomberg.

Kimberly-Clark, along with other consumer-products companies, raised prices in the past year to mitigate higher expenses for some commodities that are now moderating. Organic sales growth rose 13 percent in the international division, compared with 6 percent companywide.

The shares rose 1.9 percent to $76.75 at 8:39 a.m. in New York. Kimberly-Clark had gained 2.3 percent this year before today.

Revenue advanced 4.2 percent to $5.24 billion, according to the statement. The company is still coping with continued low birthrates in the developed world, and in January predicted full-year profit that trailed analysts’ estimates, citing slowing demand in developed markets and foreign currency “headwinds” this year.

Kimberly-Clark reaffirmed its full-year earnings forecast of $5 to $5.15 a share, excluding restructuring costs.

Connie Maneaty, an analyst at BMO Capital Markets in New York, said in a note today that the forecast is “conservative, especially given the solid organic sales results” in the first quarter. She has a “market perform” rating on the shares.

Boost Marketing

Kimberly-Clark plans to boost marketing faster than sales, particularly overseas, Chief Executive Officer Tom Falk said in the statement. Last year, about half of the company’s sales came from outside the U.S.

The quarter included $60 million in cost reductions. While the cost of fiber fell, total prices for materials rose $10 million from a year earlier. For this year, Kimberly-Clark said it expects its commodity costs to range from a $50 million decrease to a $50 million increase.

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Friday, 20 April 2012 09:42 AM
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